The Financial Supervisory Service (FSS) has issued a consumer alert after reports of fraudulent activities involving so-called 'group accounts' that appear to be personal accounts. These accounts are being misused for rental fraud and voice phishing schemes.
On May 28, the FSS announced it has issued a 'caution' alert to prevent further victimization from these deceptive group accounts that impersonate individual names.
A 'group account' is created using a name that resembles a personal name, allowing individuals to open accounts under the guise of a group. For instance, a group name like 'Residents' Association for Road Expansion in Hong-eun-dong' could be shortened to 'Hong Gil-dong.' Financial institutions are required to open accounts under the real name of individuals or the official name issued by the tax office for groups.
The issue arises because these group accounts can easily be mistaken for personal accounts. If a transaction partner sees that the name on the contract matches the account holder's name, they may transfer money without suspicion, not realizing the recipient is a group rather than an individual.
In one case, a real estate agent created a group account in the name of a landlord to misappropriate security deposits from tenants. According to the FSS, the agent, identified as A, misled landlord B into believing a rental contract was signed while receiving approximately 800 million won in security deposits through a group account named after B.
The FSS believes that financial crimes exploiting these group accounts cannot be easily avoided through standard consumer precautions alone. As a result, it plans to improve account management practices among financial institutions. They will be instructed to exercise particular caution when a group name that could be mistaken for an individual's name is used to apply for an account.
Additionally, the financial sector will implement a policy to append the term '(Group)' next to the group name when issuing accounts. Consequently, account names will appear as 'Hong Gil-dong (Group)' instead of just 'Hong Gil-dong.' This change is expected to be rolled out by banks in June.
The FSS particularly urges caution when transferring large sums, such as security deposits, noting that if the account name includes '(Group)' next to what appears to be an individual's name, it indicates that the account belongs to a group, not an individual.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.